LafargeHolcim first half profit fell 43%, the company said on Friday, as the world’s largest cement took 300-million Swiss francs ($301.81-million) in restructuring costs from its overhaul under Chief Executive Jan Jenisch.
The Zurich company said first-half net profit tumbled to 371-million Swiss francs ($373.24-million), from 651-million francs a year earlier. Sales rose 2.7% to 13.27 billion francs, while the company confirmed its target of increasing net sales by 3% to 5% every year, and lifting its core operating profit by at least 5%. Under Jenisch, who took over last September, the company has been slashing costs, announcing earlier this year it will close its head offices in Zurich and Paris and shed around 200 jobs as it aims to save 400-million annual francs by the end of first quarter of 2019.
The bulk of the restructuring is done, CFO Geraldine Picaudsaid, but declined to say how many jobs overall had been cut. LafargeHolcim, formed by a 2015 merger of France‘s Lafarge and Switzerland‘s Holcim, has also been targeting faster growth by concentrating on fewer markets and making small acquisitions. Jenisch said he was pleased with the sales growth, particularly the acceleration during the second quarter when sales increased by 5%, up from a 2.7% rate in the first three months of the year.
“We had a couple of plants where I was not happy the output was not in line with market demand. We made sure we can maximise their output in the second half,” he said. LafargeHolcim‘s figures were supported by strong growth in India, one of the company’s largest markets, where its subsidiary Ambuja Cement this week posted a 27% increase in profit during the second quarter. But losses in Africa weighed, with the regional unit reporting a loss earlier this week after being hit by higher finance charges and losses from its South African business.
Jenisch sees the Africa and Middle East region remaining tough, while adding the company would press ahead with its disposal programme where it aims to raise about 2 billion francs from selling cement plants.